Do More With Less: Australian in-house lawyers views on workplace efficiency

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1 Do More With Less: Australian in-house lawyers views on workplace efficiency October 2014

2 Introduction The in-house lawyer role has never been more important and challenging than it is today. As well as functioning as the legal conscience of the organisation, the in-house lawyer manages legal risk, provides important advice on a wide range of legal issues, and endeavours to deliver commercial value for the organisation. Furthermore, workload is increasing in volume and complexity in an era of cost containment. To understand how today s in-house lawyers are responding to these pressures LexisNexis undertook a survey with 37 Australian in-house lawyers to obtain their views and experiences on key issues affecting efficiency. Topics included: Key drivers leading to investments in efficiency; Measures that have been tried, tested and proven least successful and otherwise; Barriers to investment; and Future industry expectations. This was followed by a roundtable discussion with C-suite representatives from Australian in-house legal teams and legal firms to discuss their practical experiences with workplace efficiency initiatives and to share ideas to promote future success. This whitepaper details critical considerations expressed by in-house lawyers for the need to invest and harness technological tools and solutions to procure workflow efficiency. 2

3 Efficiency drivers In-house lawyers are strongly unanimous that the need to deliver legal services more efficiently is a critical priority for their department, with 84% of in-house lawyers indicating that improved efficiency was important. Key drivers pushing an efficiency need for in-house lawyers are: Increasing workloads; and The pressure to demonstrate value to their organisation. All survey participants agreed that efficiency gains will continue to be a major focus over the next one to two years. Despite this, survey respondents reported widespread lack of knowledge about the size of their organisation s investment in productivity improvements with 37% of in-house lawyers unaware of their organisation s funding commitment. More importantly, of the in-house lawyers surveyed, 43% said that 5% or less of their annual budget is allocated to efficiency initiatives. Percentage of annual budget being reinvested into productivity improvements for the financial year ending % 3% 37% Don t know Less than 5% Between 5-10% Between 10-15% Between 15-20% 43% 3

4 More for Less When reviewing annual budgets, in-house lawyers cited inadequate funding for systems as one of the top barriers to efficiency achievement. Professor Richard Susskind says that liberalisation, doing more for less and technology are the three main challenges for the future lawyer. 1 These challenges are already coming into place and in-house lawyers are undertaking a number of initiatives to improve the efficiency of their legal service delivery. Of those surveyed, 66% of in-house lawyers indicated the most popular initiative to drive efficiency initiatives were technology tools and solutions. While technology is clearly an important tool, in-house lawyers are also placing a strong emphasis on non-technology drivers including knowledge management, skills development and flexible staff work practices. Have you undertaken any of the following in your efforts to improve the operational efficiency of your legal department? Use of technology tools to drive efficiency Outsourcing legal work to external legal counsel Skill development & training Knowledge management Shift work to paralegals Use of alternative staffing strategies Use of technology tools to replace human activity Reengineering work processes 10% 20% 30% 40% 50% 60% 70% 1 Susskind, Tomorrow s lawyers: An introduction to your future,

5 Overcoming Resistance Roundtable participants discussed resistance to change as a key barrier to engaging technology to become more efficient. There was a general uncertainty in understanding how technology can help, which technology to use, and how to invest in efficiency tools. Investing in expensive technology is problematic with the sheer pace of technological development. Businesses risk investing in tools that become outdated, or are replaced with cheaper or free options. There was a general consensus on the need for increased training to encourage lawyers to use technology, which should also give more information on available options. In this sense, it is encouraging to see steps undertaken to invest in human capital. As providers of professional services where intellectual capital is the stock in trade, it is important to develop and sustain this intellectual capital with focus on training, management and flexible work initiatives. There was general agreement that there had been significant gains in making businesses more efficient. The focus now is on making lawyers more efficient and overcoming lawyers generally older lawyers resistance to using technology. Not surprisingly, participants felt that cultural change supported by increased skills development, training and innovative approaches to encouraging lawyers to embrace technology would overcome this issue. Future Efficiency Trends In the next one to two years, participants agreed that efficiency will grow in importance and focus. In-house lawyers identified technology as the most fertile area to unlock future opportunities, followed by process improvements/automation and talent management. The area of least opportunity identified by them was outsourcing. Which of the following areas do you believe provide the best opportunity for future efficiency gains at your firm or in your daily work life? Technology e.g. software and tools Process improvement and automation Talent management Analytics / business performance metrics Mobility e.g work flexibility Job roles / responsibility changes e.g. functional managers Reduce insourcing and increase outsourcing 10% 20% 30% 40% 50% 60% 5

6 Summary The surveyed in-house lawyers are united in their opinion that improved efficiency is critical to their legal department and will grow in importance and focus in the coming years. Technology tools are the most popular solution to drive efficiency and deemed to be the way in which to unlock efficiency gains into the future. Interestingly, reducing insourcing and increasing outsourcing was thought to be the least effective way to achieve future efficiency gains. In order to reap the benefits of technology, investment is required. However, a large number of surveyed in-house lawyers indicated that less than 5% of their annual budget is allocated to efficiency initiatives, indicating that there are substantial barriers to investment. It was postulated that businesses are averse to investing in technology tools for the in-house legal department either because the benefits are unclear, or they fear that with the rapid rate of technological change they won t reap the expected return. To overcome this resistance it was generally agreed that a focus on skills development for in-house lawyers will encourage them to embrace new technologies and effectively advocate internally for their adoption. Organisations will need to invest in technology tools if in-house lawyers are to meet the increasing demands for efficiency. With the unique needs of the in-house legal function, it will be vital for in-house lawyers to seek out technology solutions that meet their specific needs to enable better, faster decision making, improve workflow efficiency and ultimately deliver greater value to their organisation. About LexisNexis Pacific LexisNexis Pacific is the leading provider of local and international news, business, tax and legal information, using leading-edge technology, tools and digital solutions both in Australia (www.lexisnexis.com.au) and New Zealand (www.lexisnexis.co.nz). LexisNexis Pacific works in close collaboration with its customers to provide content enabledworkflow systems for professionals in law firms, corporations, government, law enforcement, tax, accounting, academic institutions and compliance assessment. To learn more, visit or call us at Reed International Books Australia Pty Ltd trading as LexisNexis. LexisNexis, LexisNexis Red and the Knowledge Burst logo are registered trademarks of Reed Elsevier Properties Inc., used under license. 6 GR102014JB

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